Agencies can’t always tell who’s dead and who’s not, so benefit checks keep coming

The U.S. government has a problem with dead people. For one thing, it pays them way too much money.

In the past few years, Social Security paid $133 million to beneficiaries who were deceased. The federal employee retirement system paid more than $400 million to retirees who had passed away. And an aid program spent $3.9 million in federal money to pay heating and air-conditioning bills for more than 11,000 of the dead.

These mistakes are part of a surprising glitch at the heart of the federal bureaucracy. Because of a jury-rigged and outdated system meant to track deaths, the government has trouble determining exactly which Americans are deceased.

As a result, Washington is bedeviled by both the living dead and the dead living.

The task of tracking deaths for the federal bureaucracy is an enormous one; about 2.5 million Americans die each year. Federal officials say the vast majority of these cases are handled correctly: The death is recorded. Government money is no longer sent to that person.

But not always. In fact, glitches in the system have paid more than $700 million to the dead, according to government audits performed since 2008.

The trouble with dead people often begins with something called the Death Master File, which is kept by the Social Security Administration. Every day new reports are added, provided by relatives, funeral homes and the state agencies that issue official death certificates.

The list contains 90 million reports.

The problem is that not all of them are correct.

Now, after years of inattention, President Obama and two senators have laid out ideas to improve the system. In his 2014 budget, Obama requested $22 million to improve the death reports that come in from states by upgrading their systems to transmit faster and more accurate data.

In the Senate, Carper and Sen. Tom Coburn (R-Okla.) have written a bill that would require all federal agencies to check the Death Master File before paying benefits. It would also give all agencies access to the full file, not just the partial one. And it would require new efforts to make sure the data in the file are accurate.

-David A. Fahrenthold, WashingtonPost.comREAD MORE...

Department of Defense to Use Invoice Processing Platform (IPP) for Intra-governmental Buy/Sell Transactions

In 2012, Treasury launched a proof-of-concept pilot using IPP to help federal agencies manage intra-governmental buy/sell transactions. Several agencies participated in the pilot, including the Department of Defense (DoD), who found that IPP helped increase visibility into intra-governmental buy/sell transactions, as well as helped with difficult, labor-intensive reconciliation and elimination efforts.

On August 5, 2013, the Under Secretary of Defense (Comptroller) issued a memo that it is partnering with the U.S. Department of the Treasury to implement the Invoice Processing Platform as DoD’s core system to manage all inter- and intra-governmental transactions and documentation. According to the memo, this partnership will strengthen management and accountability for nearly $273 billion in intra-governmental business.

The phased implementation will initially include only DoD-to-DoD transactions. At a later date, transactions between DoD and its civilian trading partners will be included. Excluded from this effort are commercial transactions (which will continue to be managed using DoD’s Wide Area Workflow) and DoD's interfund transactions.

The buy/sell process between government agencies has been fraught with challenges. A 2013 GAO audit of the U.S. Government's Fiscal Years 2012 and 2011 Consolidated Financial Statements (report GAO-13-271R) found a $20.2 billion difference in intra-governmental buy/sell activity and balances. It also revealed that the reconciliation process for buy/sell transactions was difficult and labor intensive.

IPP supports more efficient intra-governmental buy/sell transactions between federal agencies by helping ensure consistent communication between trading partners and providing visibility into each stage of the transaction.

To view the DoD memorandum regarding the implementation of IPP for intra-governmental buy/sell reimbursable transactions, please visit:http://www.ipp.gov/downloads/DoD_Memo.pdf

For more information on the DoD IPP intra-governmental buy/sell implementation, contact the DoD Business Integration Office (BIO)

at (703) 697-1096.

For more information on IPP’s intra-governmental capabilities, contact Michael Bolin at michael.bolin@fms.treas.gov.

For more information about the features and benefits of IPP’s intra-governmental module, visit: http://www.ipp.gov/about-ipp/intra-governmental.

- Federal Reserve Bank of Boston / Treasury FMS
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Agency CFOs feel strain of impending budget cuts

Federal chief financial officers and deputy CFOs are feeling more pressure to help their agencies deal with impending budget cuts.


With the White House planning to release the fiscal 2013 budget request Feb. 13, agency CFOs and deputy CFOs said in an exclusive online survey by Federal News Radio that their top three priorities and challenges all revolve around improving how their agency manages spending. Agencies expect the 2013 request to include significant cuts in across-the-board discretionary spending.

CFOs and deputy CFOs said helping their agencies deal with budget cuts is their top priority for 2012 with an average ranking of 1.9 out of eight choices. Respondents ranked second "helping my agency use financial data to make better decisions." Reducing improper payments, solving data quality and integrity issues, and modernizing or improving their agency's general ledger financial systems rounded out their top five priorities.


CFOs and deputy CFOs also worried that their workforces are not ready to help them use data to make better decisions or to figure out how best to save money. In two related questions, a majority of respondents said their workforces needed help.


And finally, when asked to rate priorities on a scale of 1-to-5, with five being very important, workforce training received the highest average rank of 2.7, while reducing improper payments (2.8) and cutting costs (2.82) rounded out the top three.


At the same time, however, CFOs and deputy CFOs said the biggest challenge facing the financial-management community was budget reductions and too many unfunded mandates, while workforce issues ranked much lower.


While workforce training is a major concern, only 9 percent of respondents said they were likely to move their financial-management system to a shared-service provider in 2012. Just under half of the respondents, 45 percent, said they do not plan on using the Treasury Department's electronic payment processing system in 2012 either.

CFOs and deputy CFOs gave good marks to Treasury's 12-step plan to improve financial management, with 46 percent saying it's making a difference. But 37 percent said it's moving too slowly — so there seems to be agreement and also desire for improving the federal financial management process.


In fact, 55 percent said the 1990 CFO Act needs to be updated, while 18 percent said there are some parts that need to be revised.

Finally, CFOs were unsure how the Government Accountability and Transparency (GAT) Board would affect the government. Of the respondents, 18 percent said it will improve oversight and help gain control of spending, 36 percent said it will be another bureaucratic oversight body and 46 percent said it was too early to tell if it will help or hurt.


-Jason Miller, FederalNewsRadio
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Treasury Internet push may speed $532 billion to U.S. vendors

A Treasury Department push for electronic invoicing for federal contractors could speed payments and save the government $450 million a year, the government says.


Treasury, which purchased about $6 billion in goods and services last year, is mandating that by 2013 its offices and bureaus must receive invoices from vendors via its new Internet payment system.

Because most U.S. agencies still rely on paper invoices, government-wide adoption of electronic billing could cut payment processing times in half, accelerate cash flow for vendors, and reduce late-payment interest charges. Those innovations would save the government $450 million a year, according to a Treasury statement issued on July 13. The government paid contractors a total of $532 billion in fiscal 2010.
Treasury said its bureaus and offices, whose roles include processing tax returns, seizing terrorist assets, printing U.S. currency and regulating banks, would save $7 million a year by using the platform, which is maintained for Treasury by the Federal Reserve Bank of Boston.


The Defense, Interior and Agriculture departments already use electronic invoicing. Interior, the Social Security Administration, and Agriculture’s Forest Service use the new system, known as the Internet Payment Platform, said Adam Goldberg, director of the Treasury’s Office of Financial Transformation and Innovation, formed last year. The Justice Department and the Census Bureau, which issued a request for industry input on electronic invoicing last month, have expressed interest.



-Nishad Majmudar, WashingtonPost.com
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Regulations could bog down financial system modernization

The Obama administration's plan to modernize financial systems governmentwide could hit regulatory speed bumps, according to an analyst who monitors government spending.

The U.S. Government 2009 Financial Report, released on Feb. 26, said agencies must reconsider expensive, long-term investments in favor of shorter-term, more efficient information technology solutions that rely on shared services, which are centralized IT hubs that support multiple agencies. The Office of Management and Budget plans to issue guidelines on overhauling financial systems by the spring. But it will be a challenge for agencies to find tools that can meet the federal government's myriad, strict accounting rules, said Ray Bjorklund, senior vice president and chief knowledge officer at FedSources, a market research firm. In addition, long-term investments cannot be turned off overnight.

Agencies have tried to revamp outdated, disjointed financial systems before, but have encountered the same obstacles likely to stymie this effort, Bjorklund noted. The George W. Bush administration launched the Financial Management Line of Business Initiative to lower the cost and boost the performance of systems by decommissioning existing technologies and moving to shared services. The hurdle confronting that effort and the new one is the mountain of federal financial management requirements for systems, Bjorklund said.

He pointed out that the Financial Systems Integration Office has verified just seven products as compliant with core financial system requirements.

Financial management has requirements that go beyond book-keeping and trace back to the Constitution, Bjorklund explained. GAO maintains an appropriations law book surpassing 2,600 pages; the OMB Office of Federal Procurement Policy issues standards for contractor reporting; the Federal Acquisition Regulations stipulate how contracts are to be structured; and the Treasury Department maintains the U.S. Government Standard General Ledger, Governmentwide Financial Report System, Government Online Accounting Link System, and other rules. Then, each agency has a variety of contract reporting and payroll systems, in addition to complying with international banking standards for electronic funds transfers.

OMB spokesman Tom Gavin said such long-standing audit and reporting requirements are not the drivers of the escalating cost of financial systems. Rather, the barriers include the unnecessary intricacy of business processes, the use of decentralized IT for common financial management activities and a lack of robust project management.

OMB's Office of Federal Financial Management is working closely with agency chief financial officers to identify procedures for exercising better oversight of spending and easing information sharing between systems, Gavin added.

This spring, Treasury is testing a model for vendor invoices that will be made available to all federal agencies and their suppliers, department officials said on Friday. The system allows vendors to electronically submit bills to a central location for processing. At present, agencies maintain separate invoice systems, creating duplication. The new arrangement would consolidate data from all transactions into a single Web site. Agency officials would be able to view a directory of suppliers already enrolled in the system.

Standardizing the billing process is intended to cut costs by eliminating the need to re-enter data -- and improve data quality by reconciling information from multiple sources, Treasury officials said. The Federal Reserve Bank of Boston, acting as Treasury's fiscal agent, is assisting Treasury with the pilot.

Gary Therkildsen, federal fiscal policy analyst at government transparency group OMB Watch, said the administration's tactic is a reversal of other modernization approaches that have failed. For example, the IRS abandoned a plan to update its tax-filing Web site because of poor planning and the high cost of replacing existing equipment. In contrast, the White House's plan calls for inexpensive measures and new OMB guidelines.
- Aliya Sternstein, NextGov.com
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